Last updated: April 18, 2013 4:06 pm

Nokia shares slide as revenues disappoint

Nokia sold the fewest mobile phones ever in a quarter under its chief executive Stephen Elop as revenues at the struggling Finnish group fell to their lowest in more than a decade.

It sold 62m of its basic mobile phones in the first quarter, down by more than 25 per cent from a year earlier and the fourth quarter, leading to worries that cheap devices running on Google’s Android platform were stealing customers from it in countries such as China. Mobile shipments in China were just 3.4m phones, down from 23.9m two years previously.

Group revenues in the first quarter were just €5.9bn – the lowest quarterly figure for 13 years, according to Bloomberg – against analysts’ estimates of €6.5bn.

Nokia’s shares fell as much as 13 per cent in Helsinki on Thursday. They closed down 8.3 per cent at €2.42.

Ian Fogg, an analyst at IHS Screen Digest, said Nokia was in danger of becoming the third-largest mobile manufacturer, having been the largest as recently as last year.

Mr Elop, who has been chief executive since 2010 when he was brought in to stop the sales rot and Nokia’s travails with smartphones, admitted to the Financial Times that the basic mobile phone business was very competitive.

“We have to make sure the product portfolio is as competitive as possible. We are due for a significant refresh,” he said, pointing to Nokia’s Asha feature phones, which sold 5m in the first quarter compared with 9.3m in the previous three months.

The sharp decline in mobile phones overshadowed a further small improvement in its smartphone business. Its flagship Lumia devices had a record quarter selling 5.6m, up 27 per cent from the previous quarter. Nokia said it would exceed that growth rate in the current quarter as it continues to introduce new models, including plans revealed by the FT this week for a so-called “phablet”, or large-screen phone.

But analysts were also disappointed with its guidance for its mobile unit as a whole with a forecast of an underlying loss at an operating level for the second quarter, against a tiny profit of €4m for the January-March period.

Nokia has struggled to keep up with its bigger rivals, Samsung and Apple, which are expected by analysts to have sold 62m and 37m smartphones in the first quarter respectively.

Two relative bright spots for Nokia remained its Nokia Siemens Networks joint venture in telecoms equipment, which beat analysts’ profit expectations again, as well as a small increase in its closely watched net cash position to €4.48bn.

Asked if Nokia could buy out its partner Siemens from NSN, Mr Elop said: “All options are available to us.”

Nokia reported an operating loss of €150m after an unexpected profit in the fourth quarter of €427m.  

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